May 17, 2016 in Investing In Real Estate
I love working in the niche of probates, but that’s not true for all investors. I think the reason is they just don’t have the knowledge they need about probate investing and how the process works. Probate investing is not that much different than other niches, but because the property is part of an estate that seems to make a difference in the way people feel about it.
Here is the main thing to remember about probate investing:
The heirs rarely want the house; they just want the cash sitting in that property.
The 10 Most Common Questions I’m asked About Probate Investing
People have a lot of questions about probates. In fact, I am asked the same questions all the time.
Today I decided to take the 10 most common questions I am asked about probate investing and answer them. Many of these topics could be (or have been) entire blog post or video so today you’ll be getting the “short version”. I plan to take some of these topics and elaborate on them in the future.
#1. Why Is There Less Competition in the Probate Niche?
There is less competition for several reasons.
- A lot of investors just think it’s just strange working in this niche
- Others just don’t know the process and how they fit into it
- Another reason is they just aren’t willing to do the work involved to get the information needed to get those leads
If you want to jump into this very profitable niche, take the time to learn about the actual probate process and about probate investing in general. You are going to find that these folks are some of the most motivated sellers on the planet.
#2. Why is it So Hard to Get Probate Leads?
The reason it’s so hard to get the information is because the process is different everywhere. This is also the reason there is less competition. There are over 3300 counties in the US and each one of those counties has a different process for getting probate leads.
When you think about probate investing, the reason this niche is so great is also the reason a lot of people won’t go to the trouble to learn the process for getting leads in their area. It’s not always easy.
#3. I Feel Bad Profiting off of Dead People or – Isn’t it Weird Talking about Dead People?
I hear this comment all the time. Sellers are all pretty much the same. It just so happens that folks in probate are there because someone died. They are also there because they have a problem; they have house they need to sell and that’s why the need us. We are there to help them solve a problem. It really is that simple.
#4. Why Can’t I Just Call the Family Instead of Sending Direct Mail?
My initial contact is never by phone. I always send a letter to the executor/administrator. If you think about this for a minute; how would you feel if someone called you out of the blue when your loved one passed away? You wouldn’t like the intrusion.
These folks will call when they are ready. Some families will dive right in and open the estate. Other people may wait a year or longer. Generally speaking, when they open the estate they are ready to move forward with the sale of the property.
#5. Can You Wholesale Probate Deals?
Any real property must be sold before the estate can be closed. In most states you just put the property under contract and move forward. Be aware that some states like California have a very different procedure. You will need to learn how the probate process works in your state.
#6. Don’t Most Probates Want Retail for the House?
Some sellers will want retail and some won’t. When you think about probate investing, these sellers are no different than any others. Houses that are in great shape will generally be listed on the MLS. Properties that need repairs and updates are the likely candidates to be sold to an investor.
Remember this –
7#. Can You Use the Multiple Offer Strategy for Probates?
You can, however you need to remember that these sellers almost always want to “cash out”. That’s the main reason they are so motivated. They just want the cash. There may be rare occasions where they will be willing to do owner financing or some other type of creative deal but that isn’t typical.
#8. What Can I Say When the Family is embarrassed about the Condition of the House?
Truthfully, this happens all the time. As a member of the family walks through the house with me they are apologizing because there is so much “stuff”. If you are sincere, it’s pretty easy to put the seller at ease just by telling them this is typical especially when the deceased is elderly.
It’s not unusual to see stack of butter tubs, receipts from decades past and just a lot of junk. You may also run into some hoarders. Remember to always offer to clean out the house for them. That’s often the one thing that will seal the deal.
#9. What If the Deceased’s Relatives Won’t Move Out of the House?
The short answer is let an attorney handle this problem. Just get the house under contract. Here’s a short video on this topic.
#10. What Can I Do When the Heirs Don’t Agree?
When you are talking about probate investing, things usually go smoothly and the closing is typically uneventful.
However … there are times when you feel like the peacemaker/counselor/teacher. People will need to be educated about the process, you will be there to initiate problem solving conversations with the family and to help soothe hurt feelings. After years of working in this niche, I have found that you usually just need to be a good listener. Here are a few tips for you in this short video.
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